The accounts department

1. The accounts department

The accounts department is responsible for keeping a detailed record of a firm's business transactions. Nominal accounts usually refer to the record of the various kinds of expenses (rent, wages, advertising, etc.) income, profit and loss. Real accounts relate to tangible things, such as land, machinery, furniture and cash. Personal accounts are the records of business with firms or people i.e. the suppliers and the customers.

The accounts of the firm are kept in books called the Ledgers:

• the sales ledger: this is a list of goods or services supplied.
• the purchases ledger is a list of goods or services purchased.
• the general ledger is a list of property such as machinery, vehicles, buildings. It is a record of nominal accounts and real accounts.
• the private ledger is confidantial and records items such as capital, loans, mortgages, directors' salries and awards.

The accounts department sends out, at regular intervals, statements of accounts to its customers. This is a record of the amounts paid in and darwn out (deposits and withdrawals) and gives the balance.

The Balance Sheet

This is a statement of a company's position on a certain date. It shows the Assets and the Liabilities of the firm.

Assets

These include the current assets: cash and what assets can be burned into cash within a reasonably short time (perhaps a year).

a) Marketable Securities

This asset represents temporary investment of excess cash in the form of Government Bonds and Government Securities for the purpose of earning dividends and interest.

b) Accounts receivable

These are the amounts not yet collected from customers.

c) Inventories

Here you have raw materials, partially finished goods and finished goods ready for shipment to customers.

There are also the Fixed Assets which include Property, Plant and Equipment. These assets represent the part of the firm which is not intended for thze sale but is used to manufacture the products, display it, warehouse it and transport it. In this category are included land, buildings, machinery, equipment, furniture and transport equipment.

The cost is calculated on the basis of cost less depreciation. Depreciation is the reduction in the value of the property and equipment due to wear and tear from use, p assage of time or obsolescence.

Liabilities

This is all money owed, i.e. debts.

Current liabilities

These are all debts which must be paid within the coming year.

Accounts Payable

These are the amounts that the company owes to its regular business creditors (people of companies to whom the company owes money). The company also owes salaries and wages to its employees and interests on funds borrowed from the banks.

Long-term liabilities

These are all debts which are payable after one year. Mortgages are included in this section.

Before the Balance Sheet can be drawn up Stock Taking must be done. This is a list of all the goods in stock together with their value. This may sound easy bit in fact is very complicated as finished stock and the volume of finished stock changes daily! The rule for stock valuation is that it should be taken at cost price or market price whichever is lower.

The profit and loss account

This is a summary of all the income and expense accounts at the end of the accounting period. The balance of this account represents the net profit or loss for the period.

The auditors

Every year the accounts of a limited company must be approved by auditors. They act on behalf of the shareholders. Their duty is to ensure that directors are reporting correctly on the state of affairs of the company.

2. Vocabulary

- Accounts: comptabilité
- Trading and profit and loss account: compte d'exploitation et de profits et pertes
- Assets: actif
- Current assets: actif disponible
- Auditor: commissaire aux comptes
- Balance sheet: bilan
- Depreciation: amortissement
- Fixed assets: immobilisations, actif immobilisé
- Finished stock: stock fini
- Ledger: grand livre
- Liabilities: passif
- Current liabilities: exigibilités, passif exigible a court terme
- Mortgage: hypothèque
- Turnover: le chiffre d'affaires
- To balance the books: arrêter les livres
-Cash: caisse
- Long-term liabilities: passif à long terme
- Accounts payable: effets à payer
- Accounts receivable: effets à recevoir
- Inventories: les stocks, l'inventaire
-Wear and tear: l'usure
- Obsolescence: le vieillissement technologique
- A credit balance : un solde créditeur
- A debit balance : un solde débiteur

3 Commercial letters concerning invoicing and payment (clik here to see models of letters)

Useful expressions

a) We are pleased to confirm receipt of: Nous accusons réception de votre traite
b) We enclose an invoice amounting to: Veuillez trouver ci-joint la facture d'un montant de
c) Please let us have your cheque for: Veuillez nous faire parvenir votre chèque
d) A quarterly statement of accounts is sent to all customers: Nous envoyons un relevé trimestriel à tous
nos clients
e) Your remittance was credited to our account: Votre règlement a été crédité à notre compte
f) If you do not settle at once we shall have to take legal proceedings: Faute de paiement immédiat, nous serons forces de prendre les mesures contentieuses qui s'imposent.
g) The 3 % discount for prompt payment should not have been deducted as you are in arrears : L'escompte de caisse de 3 % accorde pour paiement comptant n'aurait pas dû être déduit, puisque votre solde était débiteur.
h) We will be forced to cease granting open account terms unless your quarterly account is settled within ten days: Nous nous verrons dans l'obligation de résilier votre compte si vous ne réglez pas dans un délai de lO jours votre relevé trimestriel.
i) This is to advise you that our bank has been instructed to remit the sum left uncleared: Nous vous avisons que nous avons donné l'ordre à notre banque de vous virer Ia somme restant due.


Other useful vocabulary

- Accountant: comptable
- Accounting: la comptabilité
- Actual: réel
- Bad debt: créance irrécouvrable/douteuse
- Bookkeeper: aide-comptable, agent comptable
- Bookkeeping: enregistrement des opérations dans la comptabilité
- Budget ceiling: enveloppe budgétaire
- Cash in flow: rentrée de trésorerie
- Cash in hand: caisse disponible
- Cash out flow: sortie de trésorerie
- Cash requirements: besoins de trésorerie
- Financial year: exercice annuel
- Opening balance: solde initial
- Profitability: rentabilité
- Transfert of assets: apport d'actif